Welcome to mid-week trading, yo!
What do you think of these setups?
EUR/GBP has recently broken above a descending channel resistance that had been solid since mid-September. The bullish run found resistance around .9150, however, and so now the pair is trading just under the .9100 area.What makes EUR/GBP’s current levels interesting is that it lines up with the broken channel resistance, a 50% Fib retracement, and the 100 SMA on the 1-hour time frame.
Are we looking at a break and retest scenario over here? Buying at the first signs of bullish momentum is your best bet if you think that EUR/GBP’s upside breakout is legit and will soon lead to new October highs.
Think EUR/GBP saw a fakeout instead of a breakout? I’m not seeing any bullish candlesticks just yet, so the euro could still head to the 61.8% Fib support closer to the 200 SMA or even return to its downtrend.
If the euro does go back to its descending channel, then EUR/GBP could head to mid-October’s lows near .9030.
Dollar traders unite! USD/CHF is heading fast towards the .9015 handle, which marks the lows that had held as support back in August.With Stochastic poppin’ up oversold signals, you can bet that dollar bulls are already looking at this one.
A long trade at a (clear) bounce from the range support would make for a solid reward-to-risk ratio especially if you place your stops just under .9000 and you aim for the range resistance near .9200.
If you believe that the dollar’s downswing has legs, however, and that USD/CHF is due for a downside breakout, then you can also trade a clear break below the .9000 support and then aim for previous areas of interest near .8900 or even .8750.
I gotta tell you, USD/CHF hasn’t seen those levels since 2015 so you’re gonna need BIG catalysts to see the dollar drop that far!